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EMF 9: North American Natural Gas Markets

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Hillard Huntington


This research study focuses on the evolution of the North American natural gas markets between now and 2010. The group's findings are based partly on the results of a set of economic models of the natural gas industry that were run for four scenarios representing significantly different conditions: two oil price scenarios (upper and lower), a smaller total U.S. resource base (low U.S. resource base), and increase potential gas demand for electric generation (high U.S. demand case).

The North American natural gas markets examines the four-first round scenarios including: (1) an upper oil price path, (2) a lower oil price path, (3) a lower resource base, and (4) a higher gas demand due to policies and technologies affecting the electric utility sector. Each scenario represents a combination of markets and regulatory environments. For example, the upper oil price scenario combines an upper oil price trend with a reference set of resource and demand conditions and with a pro-competitive regulatory environment. This scenario also serves as a control case for comparing the other scenarios, which specify a change in one of the environments for oil prices, resources, or demand. The regulatory environment has been maintained constant across these first-round scenarios, but may be changed depending upon the later recommendations of the regulatory policy and market structure study group.

This research describes detailed specifications for modelers in simulating the upper oil price scenario and offers guidance for energy prices, economic activity, and resource base estimates. It also discusses other scenarios that involve changes in these inputs from their values in the upper oil price scenario. Special wellhead price assumptions for stand-along supply models and plans for developing inputs for Canadian models are also discussed. All results of this study are published in the three volumes published. See below to download.

Project Contact: 

Hillard Huntington